Financial Literacy for Everyone

Etiquette in the New Economy

Thereís no getting around it. 2009 was a bumpy ride.

While reports suggest that our economy is on the rebound, unemployment is still high. Many of us are dealing with, or know someone facing a significant financial issue. It might be unemployment, foreclosure, or just some serious belt tightening.

At Practical Money Skills, we offer information about the mechanics of saving money and budgeting. But mastering the social skills that can help diffuse the stress of financial hardship is equally important. People in trouble donít always want or know how to get help. Friends want to provide emotional support, but donít quite know how to broach topics without feeling like they are butting in.

Here, we offer some practical tips and thoughts to provide perspective, handle potentially awkward situations, and find ways to better give or receive support.

  • Avoid survivor guilt. Just because a friend or co-worker has lost their job doesnít mean you canít ever talk about yours. Itís part of your life, and a natural topic of conversation. Avoiding it entirely will not go unnoticed and may create awkwardness. Just donít let it dominate every conversation.
  • Vent with caution. If a laid off co-worker needs to unload a bit about your company, thatís perfectly natural. Be a good listener, be discreet, but be careful about chiming in yourself. If youíre the one venting, donít do it in mixed company and put your former colleagues in an awkward spot.
  • Join the job hunt. If youíre out of work, donít be afraid to network with friends and former colleagues. But donít expect or rely on othersí help too much either. If you want to assist an out-of-work friend with job leads, offer your services, but donít push. They may not be open to it. Also, think about the best way to help. If youíre uncertain about a friendís job skills, you might be better off helping in other ways, such as resume advice, interview tips or even just providing a friendly diversion. Job hunting can be exhausting.
  • Broaden your social activities. This doesnít mean you canít ever go shopping with a newly unemployed friend, if thatís what you always do together. But if you know your friendís financial situation is challenged, begin to mix in activity options that donít cost much. Then let your friend decide which activity to do.
  • Rethink restaurants. If your ďdining outĒ budget took a hit, donít tip less, but explore more affordable restaurants instead. If you are going somewhere special, and want to treat a financially strapped friend, make the offer upfront to avoid any uncertainty, and be gracious whether they accept or decline. And finally, itís perfectly okay to ask for separate checks when dining out, to avoid financial bloodbaths with any extravagant foodies in your life.
  • Should you borrow? Should you loan? Weíve saved the toughest dilemma for last. Asking, or being asked to borrow money by friends or family members can be a tricky affair. For the borrower, consider other avenues first (bank, credit union, etc.). Be sure to explain how youíll use the money, and more important, how and when you will repay it. Being direct is sometimes better than delivering a sob story. Finally, donít take rejection personally. Your friend or family memberís own finances may not be as solid as you think. If youíre the one being asked for the loan, donít feel obligated to answer right way. Think it over. Consider whether you can really afford it. And make sure the loan makes sense. If your loan is only going to prolong the agony and not truly help fix a problem or fund a solution, it might be best to decline. Saying no may be hard, but just be respectful of your friendís feelings and realize how difficult it probably was to ask. If you do decide to strike a deal with a friend, consider a service like Virgin Money US, which can help give the loan some official parameters.

    Borrowers may also want to check out peer-to-peer lending options, such as Prosper and Lending Club. These services connect individuals who need to borrow with individual investors willing to loan. Not all services are available in every state, but both companies are SEC-regulated, and provide a legitimate alternative to borrowing from friends or financial institutions.

Financial troubles can bring many different uncharted social situations to navigate, but in most cases, the rule of thumb is simple and something you already know. Be honest, considerate, and most important of all, be there. Relationships help us get through tough times. Donít ever stop investing in them.

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